The 2 Largest Payouts In Lemon Law Cases

Lemon laws are in place to protect people who have purchased a new vehicle or another type of product that does not live up to the reasonably expected standards of performance and quality. All states have lemon laws in place for new products, but only very few have them in place for used products. In almost all cases, the ‘product’ is a vehicle, although the laws can also be applied to other types of goods and merchandise.

There have been many lawsuits relating to lemon laws. In most cases, if a judge believes the lemon law is applicable, compensation will be awarded to return the value of the product and any costs associated with repairs. Sometimes, an extra compensation is awarded for things such as lost time, although this is rare. In extraordinarily rare cases, the payout is huge and makes headlines in the news. Two of those cases are outlined below.

1. $482,000 in Mercedes-Benz E320 Sedan Case

This is a very good case that demonstrates how sometimes, awards in lemon law cases can be much higher than the value of the vehicle. This particular case, involving Marco Marquez, took place in Wisconsin. Wisconsin is known to have some of the strongest lemon laws in the country. Marquez purchased a Mercedes-Benz E320 sedan and started to experience problems almost immediately after buying it in 2005. The dealer did not repair the vehicle and Marquez filed a claim. Initially, he was unsuccessful, but he was eventually awarded $482,000 for damages, as well as legal fees. Put together, this is around ten times as much as the value of the vehicle, if new. Achieving this took a long time, with lengthy court proceedings and numerous appeals. As such, this particular case demonstrates that people can have significant compensation if they feel they can make a lemon law claim, but they must have a lot of patience. Under Wisconsin lemon laws, awards should be double the price of the vehicle, which tends to already be a significant amount. In this case, however, the award was far greater.

“Order and judgment reversed and cause remanded.”

2. $126,836 in Tesla Case

Interestingly, the same attorney who dealt with the Marquez case also dealt with this second case. This is why he is known as the ‘Lemon Law King’. This particular case is the first to be filed against Tesla Motors Inc. Robert Montgomery purchased a Tesla in Milwaukee and claims that it has spent most of its time in a repair shop. The vehicle had been purchased for $98,000 and Tesla ignored requests to buy it back. Prior to this, Montgomery also filed a lemon law suit against Volvo, which he won in an out of court settlement. Tesla also agreed to settle for $126,836 and feels that he matter is now closed. Several lemon law inquiries have been made against Tesla since then, but none of those have led to lawsuits or payouts. Interestingly, Tesla and Montgomery’s attorney have gone head to head very publicly about this case, although most people feel they should be able to simply settle their differences and move on.

“NOTICE OF REMOVAL by Tesla Motors Inc from Milwaukee County Circuit Court, Case Number: 14-CV-2962 with attached state court documents.”

How to File a Lemon Law Suit

If you feel you have purchased a lemon car and you have taken all reasonable steps to have the situation resolved, you may be able to file a lawsuit against the company that made the product. Before you do this, however, you must contact a lawyer. Each state has lawyers who are experienced in lemon laws and have specialized in this field. They will usually provide you with a free initial consultation, which you should take advantage of, as this may provide you with the necessary information.

You also have to take your vehicle back to your dealer for any repairs. In the vast majority of states, you have to give a dealer the chance to actually fix a problem. So, if you have purchased a brand new vehicle and it fails after the first drive, it doesn’t necessarily mean that you have a case to be made under lemon law. For instance, if a single part needs replacing and this solves the entire problem, your vehicle will not be classed as a lemon car.

If you really do feel that your car is a lemon, you will need to send a notice to the manufacturer and the dealer and this has to be sent through certified mail. You must include your personal details, including your telephone number, and details about the car, such as its make and model, year of manufacturing and VIN, as well as a full explanation as to why you believe the vehicle to be a lemon. It also has to include the attempts that the manufacturer or dealer made in terms of repairing the vehicle and it must state that you want a refund for your purchase or a replacement within 60 days of the date of the letter. Some states also have additional requirements, so do look into that. No matter where you are, this notice must be sent no more than 60 days after the warranty has elapsed, or it will be void.

“Our dispute resolution program can help you resolve your lemon law complaint, and you don’t even have to hire a lawyer. Our lemon complaint program covers car warranty issues against participating manufacturers.”

Once you have done all of the above, you will be able to file a lemon claim. Your case must be made to your state arbitration board. In fact, depending on where you live, you may have to appear before this board before you can take your case to a court of law. Sitting on an arbitration board are skilled negotiators, who will try to come up with a mutually agreeable solution first. Only if none can be found will the case be taken to court. At the same time, it is possible that your state doesn’t have an arbitration board, or that, if it does, you don’t have to appear before them first. This is why you need to find out what the lemon laws in your state are first.

“Most states’ Lemon Laws are spelled out in their legal code. But who wants to read through all that to find out whether your vehicle qualifies as a lemon?”

It is generally recommended to also enlist the services of a third party expert, such as the Better Business Bureau. They are unbiased and will make sure that all the relevant paperwork are delivered on time and to where they need to go.

About the Author

Michael Bennett

Michael Bennett is Editor-in-Chief of Consumer Protect.com. Since 1999, he's worked across a multitude of areas of consumer protection including defective products, environmental issues, identity theft, predatory lending and more. If you find his articles helpful please share them with your readers.